Analys från DailyFX

DAX: Rallying Out of Consolidation, Watch This Line of Resistance

Published

8 år ago

4 maj, 2017

DailyFX

What’s inside:

DAX trades higher out of consolidation as expected
Watch the trend-line running over tops since February
No interest in shorts, longs on dip and hold of support

When we took a look at the DAX on Tuesday, this was our sentiment: “Generally, the DAX continues to look good, and as we described the price action last week –“bullishly quiet”. That is to say, after the massive gap-n-run following the first round of the French elections the index is consolidating those gains; no real attempt to push it lower has been made. The conclusion drawn from this is it will make another run higher, sooner rather than later.”

The DAX is making good on the recent consolidation. In today’s trade, it is pushing above the first minor line of resistance coming in by way of a top-side trend-line running over swing-highs since August. We are quickly approaching the February top-side trend-line, and will soon find out how the market wants to respond to this potential line of resistance. Trend-lines running over the top of price in an uptrend are only viewed as having minor influence, but have been known to put lids on advances even if for only a short-while.

Beyond the Feb trend-line, all we have are psychological levels (i.e. – 12700, 800, and so on…), which aren’t viewed as highly meaningful, not when the number isn’t ‘special’ like say, “10,000”.

For a longer-term view on the DAX, or another market of interest, see our quarterly forecast.

From a tactical standpoint, we have zero interest from the short-side, but chasing here from the long-side doesn’t present the most appealing opportunity (especially since the market is trading very near potential resistance). In our view, there is better risk/reward attached to entries on a pullback/consolidation like the one which recently took shape.

On a pullback, support could come in by way of the recently crossed August trend-line, but we will look for the most recent swing-high of 12486 as a stronger point of support. Below the old high, the December trend-line could come into play, which arrives just above the biggest levels of support in the vicinity of 12414/375. It would require a break below that zone to turn the picture neutral to bearish – a bridge we’ll cross if necessary.

DAX: Daily

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Heads up: Traders will want to tread cautiously as the French run-off election between Macron and Le Pen approaches this Sunday, and while expectations aren’t for the same type of volatility we saw as a result of the first round of the elections, always be prepared for the unexpected.

Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

8 år ago

30 september, 2017

DailyFX

What’s inside:

EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
Resistance in vicinity of 11825/80 likely to keep a lid on further strength
Targeting the low to mid-11600s with more selling

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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

8 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

8 år ago

29 september, 2017

DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form